Will Bristol be the next council to go bust over Tory cuts?

Will Bristol be the next council to go bust over Tory cuts?

Bristol City Council could be about to go bankrupt because of Tory government cuts.

The council’s education budget is £56 million overdrawn because demand for extra support for children with Special Educational Needs has grown massively over the last decade.

If the situation continues, the council will be £114 million overdrawn by 2028; it is facing effective bankruptcy.

But there is a way out – if councillors are willing to take it: the Conservative government in Westminster has offered to write off all but £2 million of the deficit, over seven years – if the council makes huge cuts to its SEND service provision.

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Refusing to accept the government’s conditions means possible rejection from the Department for Education’s bailout programme, necessitating cuts to other services.

Poisoned Chalice

The bailout programme has been named “Safety Valve” but “Poisoned Chalice” seems a more appropriate moniker.

Bristol is not alone in its troubles – it joins 37 other councils that are facing funding difficulties, indicating that the fault lies in central government funding, not in council budgeting.

If it can’t accept the Tory conditions and cannot find a way to cut its budget, the council may have to issue a Section 114 notice, which is effectively a declaration of bankruptcy; Bristol City Council would then have gone bust because of government cuts.

Other councils in Woking, Nottingham and Birmingham were forced to issue the notice last year.

Deliberate de-funding?

With so many councils facing bankruptcy at the same time and for the same reason, one obvious question arises: Why is Rishi Sunak’s Tory government pushing them into bankruptcy?

Most council funding comes from central government – and the Tories have been cutting the amounts they have provided, ever since they first slithered back into Downing Street in 2010.

They have provided reasons ranging from “efficiency savings” to “we have to reduce the national deficit” – but none of them make any sense. For example, there weren’t many savings to be made that would have improved efficiency – cuts simply made it harder to run badly-needed services. And Tory over-spending elsewhere made the “deficit reduction” claim a lie.

This Writer tends to believe that the relentless Tory demand for privatisation of services – meaning councils have to rent equipment and property, and hire expertise, at high cost – has needlessly inflated costs. Also, when private providers bid to provide services, they often find it impossible to do so at the price they have quoted and go out of business; the money is lost and the council has to spend even more on another provider.

But that’s just speculation.

We need a proper, impartial investigation. There are plenty of organisations around that are able to carry it out. I wonder if the Resolution Foundation, which exists to improve the lives of low-to-middle-income families, might like to have a go?

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